7 Mistakes To Avoid When Investing In Precious Metals
Buying precious metals is not the only method of saving for retirement, although it is quickly becoming an extremely popular and appealing one. Several factors have influenced that and raised the popularity. All of them, though, revolve around the fact that precious metals don’t behave the same way as other assets, and they remain stable even in times of crises, which makes them a secure and safe investment. Safe and secure is the way to go when building retirement wealth, isn’t it?
Speaking of safe and secure, you’ll always have to check if the dealers you’re working with are legit before taking any investing steps, and reviews such as https://www.bondsonline.com/bullion-by-post-review-scam-or-legit/ are there to help you with. Not checking legitimacy, though, is just one of the serious mistakes investors tend to make in this whole process. Making them is not your goal, and you’re actually striving towards the opposite, i.e. towards doing everything perfectly and thus creating a great portfolio backed by precious metals. Avoiding them is, thus, your goal, and you’re wondering how to do that.
Well, avoiding those is pretty much impossible if you’re not familiar with them at all. He who doesn’t remember history is doomed to repeat it, right? In this case, he who does not know which mistakes other people made is doomed to make the same ones. Luckily, it is their history you’re trying not to repeat, not your own, and learning about the mistakes will immediately put you on the right path towards not making them and towards actually completing the investing process correctly. Ready to learn, then? Let’s go.
1. Not Having A Clear Goal On Why You’re Doing This
Different people, different motivations. Some investors are motivated by profits, while others regard precious metals as assets used for wealth insurance. And then, some play the trading game with them, closely watching the market indicators to decide when to buy and when to sell. They all behave differently to achieve their goals, meaning that the steps you’ll have to take may not be the same as someone else’s. Depends on your goal.
Not having a clear goal will have you taking various steps left and right, back and forth, completely randomly and often rather recklessly. You’ll buy without knowing why you’re buying and whether you should be buying right now, and then you may even choose to sell very quickly after that, even though your primary aim was to save the gold for your retirement. In short, the lack of a clear goal will lead to making even more serious mistakes, those that can lead to you regretting your initial decision to enter the precious metals game in the first place. Here is your guide to precious metals if you need one.
Considering It A Short Term Investment
Buying and selling at random, as I’ve hinted at above, is an indicator that you’re considering precious metals a short-term investment, and that’s another grave mistake. If boosting your retirement savings, or protecting them for that matter, is your actual goal, realizing that these assets are to be held in your portfolio in the long run is a must. Looking at their behavior on a daily basis will have you thinking that they’re quite volatile, given that they will fluctuate in value day after day. Taking a closer look at those fluctuations, however, will lead you to realize that they are pretty insignificant and that all lead to increases in the long-term.
Thus, deciding to buy now and sell in a few days, perhaps when you notice a decrease or a slight increase in value, is not the best idea. Regarding precious metals long-term investment is the way to go here, as they’ll always provide for an amazing return in the long run, while the same can’t be said for the short term. Sure, as mentioned already, some people play the trading game, always buying and selling without ever keeping an asset in their possession for a long time, but their goal usually isn’t connected to retirement savings. For those of you whose goal is connected to retirement, precious metals should never be a short-term investment.
Buying At The Wrong Time
There’s a good time and a bad time for buying pretty much anything, and that especially goes for any kinds of investments you want to make, investments aimed at building wealth and getting a return at a later stage. Getting a return will be difficult if you’re buying at the wrong time, i.e. when the prices are extremely high. Fortunately, you can look at the previous data and statistics, clearly showing when the time is right to buy which precious metals. Gold, for instance, is best bought in January, March, April, Jun and July, as its price is usually at the lowest points during those months. This is not set in stone, though, so make sure to always check the prices and the previous trends, so as to determine when the time to buy is right.
Not Doing Your Due Diligence On The Dealers
Among the precious metals investing mistakes you can make, this one is probably the most critical, as it leads to your whole plan getting ruined. Not doing due diligence on the dealers can easily result in you falling for certain scams and agreeing to work with companies that will constantly be working towards convincing you to make investments that aren’t really right for you. Scams are, unfortunately, quite common in every industry, and this one isn’t an exception.
Even if you don’t fall for scams, you could wind up working with dealers aiming at charging too much for their services, or basically offering poor quality ones. None of that’s good for you, which is why doing due diligence on the dealers is of grave importance. Researching them in great details, checking their reputation, their experience, and basically gathering as much info as you can will lead to finding the best solution instead of cooperating with dealers that won’t do you any good.
Not Discussing The Fees With Your Dealers
Failing to discuss the fees with those dealers will probably have you surprised later on. As a smart investor, you should be aware of all the fees in advance. And, you can’t become aware of them if you don’t openly discuss them with the dealer you’ve chosen, or with a few of those that you’re trying to choose among. So, ask away before agreeing to anything.
As Well As The Storage
Storage solutions will be among the services those dealers can offer you. Those solutions, and their fees for that matter, will differ from one to another, naturally, so you need to discuss it as well. Performing interviews with a few dealers, and discussing this and anything else of interest will help make the perfect choice and figure out precisely which company to work with when buying your gold, silver, or other precious metals (read more about the buying process) for your retirement.
Letting Emotions Run Your Purchases
Smart investors are never guided by emotions when making purchases. Although you can’t shut those off, what you can do is explore the idea you have and the investments you want to make and stop wanting them if you find that they’re not right for you, or if the experts, such as those dealers, advise you on not doing it at a certain point in time. Gain better control over your emotions so as to play the investing game perfectly and always do your best to have your decisions guided by your brain rather than by your heart. And, most importantly, as mentioned, take the advice from the experts, as they’ve been playing the game for much longer.